29 Ocak 2013 Salı

Turkey Beating Norway as Biggest Regional Oil Driller: Energy

Offshore Oil drilling on Turkey's Black sea cost

Selcan Hacaloğlu & Brian Swint Bloomberg

Turkey is drilling for oil and
natural gas with more rigs than any European country and plans
new rules in 2013 to speed exploration of energy supplies for
the fastest-growing major economy after China.

The country fielded 26 rigs at Dec. 31, according to data
compiled by Bloomberg, and the number has since risen to 34,
Energy Ministry officials said yesterday. Turkey has leapfrogged
Norway as offshore drilling increased in the Black and
Mediterranean seas. Spending on exploration jumped to $610
million last year from $42 million a decade earlier.

With economic growth forecast at 3.5 percent this year and
about twice the pace of the most advanced economies to 2017,
Turkey is drilling for its own energy to ease reliance on
imports from Iran, Iraq and Russia. State-owned Turkish
Petroleum Corp. has taken Royal Dutch Shell Plc (RDSA) and Exxon Mobil
Corp. (XOM) as partners, after neighboring Israel and Cyprus made some
of the decade’s biggest gas finds in the past three years.

“If there’s one country that needs energy, it’s Turkey,”
said Darren Engels, an analyst at FirstEnergy Capital in
Calgary. “Their domestic business doesn’t scratch the
surface.”

Turkish Petroleum, which is known as TPAO and has
operations in Libya, Iraq, Azerbaijan, Colombia and Kazakhstan,
needs to boost domestic output as it pursues a target of
supplying all of Turkey’s energy needs by 2023.

Turkey had proved reserves of 307 million barrels of oil
and gas in 2010, 88 percent of which is oil, according to
FirstEnergy’s Engels. In 2011 alone, the country consumed about
258 million barrels, according to the EIA.

Rules Changing

To speed up the search for oil and gas, the government
submitted a draft Petroleum Law to Parliament on Dec. 21. The
bill calls for changes to “ensure speedy, continuous and
efficient search of carbon resources,” requiring companies to
pledge 2 percent of their projects as collateral to extend
licenses, a move aimed at increasing activity and avoiding
speculation on licenses.

“Our aim is to make Turkey one of the 10 largest economies
in the world by 2023,” Energy Minister Taner Yildiz said
yesterday in an interview. “Finding energy” will “enable
Turkey to achieve its goal.”

Turkey imported about 92 percent of the oil it consumed in
2011 and 98 percent of the natural gas, according to the U.S.
Energy Information Administration.

The scale of Turkey’s energy imports is swelling the
current account deficit, fueling inflation and threatening to
restrain economic growth.

Equal Treatment

In the past, TPAO was designated as the national company
tasked with searching and drilling oil and gas reserves in the
country. The draft law no longer defines TPAO as such and in
theory it will be treated like any other company, Necdet Pamir,
head of Energy Studies Group at Ankara-based Chamber of
Petroleum Engineers, said by telephone Jan. 9.

“Foreign companies are complaining that working conditions
in Turkey are not favorable for them since they have to play
with rules of the TPAO, which holds exclusively all offshore
licenses,” Pamir said. “Chevron for example decided to pull
out after drilling the first of two wells at its own cost in the
Black Sea and paid a penalty under its agreement with TPAO.”

TPAO is just one of the contributors to the domestic
drilling boom. Shell, Exxon and smaller explorers such as
Transatlantic Petroleum (TAT) and Anatolia Energy (AEE) are investing.

The Turkish government “is doing everything it can to
attract the foreign majors,” said Timothy Ash, head of
emerging-market research at Standard Bank Group Ltd.

Turkish Geology

TPAO and Shell plan to start drilling off the coast of
Antalya in the Mediterranean in 2015, Yildiz said. “TPAO is
also planning to drill in the Black Sea in Kuskayasi field in
2014, which was abandoned by Chevron. Obviously, it would be
cheaper if it can find a partner.”

Energy officials in the ministry say the geology of Turkey,
a country which is crisscrossed by active fault lines, makes it
more difficult to find large reserves compared with neighbors.

The Mediterranean and Black Sea regions are more likely to
hold gas, while the southern part of the country is more likely
to hold oil, said FirstEnergy’s Engels.

Turkey produced 2.3 million tons of oil in 2012. The
average production is 44,000 barrels a day with domestic
production meeting 8 percent of overall consumption needs,
according to official figures. In contrast, Norway produced
about 2 million barrels of oil a day in 2011, according to BP
Plc’s Statistical Review of World Energy. Russia produced 10
million barrels a day.

Perenco, Amity

TPAO’s share in production of oil at home was 69 percent in
the first 11 months of 2012 with the rest divided among others
such as Perenco SA, Tiway Oil AS of Norway, Amity Oil
International, Transatlantic Petroleum Ltd. and Aladdin Middle
East Ltd.

While the country has found little oil and gas in its
territories, it’s one of the world’s big transport hubs for
energy. With an area larger than Texas nestled between Europe
and the oil-rich Middle East and countries of the former Soviet
Union, Turkey has four major pipelines sending gas to Europe and
there are plans for two more. It has four oil pipelines to bring
crude from Iraq and the Caspian.

Turkey may also benefit from plans by Iraq’s Kurdistan
Regional Government to build a pipeline to the north that would
end dependency on Iraq’s export infrastructure, which is
controlled by Baghdad authorities.

IMF Forecasts

The country’s future depends on having secure supplies of
energy. The International Monetary Fund forecast Turkey’s
economy will expand 3.5 percent this year, compared with 2.1
percent in the U.S. and 0.2 percent in the euro area.

In 2017, Turkey will expand 4.4 percent, while advanced
economies will grow 2.6 percent on average. In 2011, Turkey was
the 18th largest economy in the world and expanded faster than
any other in the top 20 after China.

Turkey got about half of its oil from Iran in 2012 and is
compensating for decreased purchases through imports from Saudi
Arabia, Libya and Russia amid U.S. sanctions, Yildiz said.

Turkey’s contract to buy oil from Iran will “definitely be
extended,” Yildiz told reporters on a plane from Libya to Qatar
on Jan. 6. “Turkey now buys 35-40 percent of its oil needs from
Iran, compared with 50 percent before” international sanctions
against Iran.